The Way It Is With Hydro One

Hydro One, a provider of electric power in Ontario, Canada wants to acquire Avista Corp., the former Washington Water Power Company, headquartered in Spokane, in a CN$6.7 billion July 2017 deal and approved by shareholders last month. The deal affects the way electricity is provided to Avista’s customers that stretch across a 30,000 square mile area. Following is what we have learned that affects Avista’s 377,000 customers in five states of Washington, Oregon, Idaho, Montana, and Alaska.

Utility commissions in these five states must approve the merger with HydroOne, a review process that will begin in February 2018. A yet-to-be-named Canadian holding company will take ownership of Avista but it’s unclear how this shields Avista customers from human hardships and job-killing1 experiences by Ontarians caused by Ontario’s Green Energy Act, 20092.

Hydro One’s electric costs rocketed to North America’s highest cost electricity in 2015 at 29.9 cents/kilowatt­ hour (low density urban), a direct result of green energy laws. Hydro One already promised increases to 66.2 cents in 2018 and 83.9 cents in 2019, a level 12 times larger than Avista’s 2016 small business rate of 7.1 cents per kilowatt-hour and 35 times larger than Washington’s Chelan and Douglas County PUDs 2.36 cents/kwhr rate3.

HydroOne’s service is poor. It charges ratepayers more for deteriorating service yet ignored 10,000 complaints about high costs. Outages are 30% longer, 24% more frequent. Their transmission system is in considerable disrepair, the least reliable of Canada’s distribution companies56. Ontario’s Auditor General slams its electricity sector as dysfunctional and customers over­paid $37 billion for electricity.

73% of Hydro One’s utility charges are for global adjustment and delivery fees while just 27% is for electricity used. Ontario electricity powers energy poverty7. Economists and company CEO’s say rates are causing ‘serious harm.’

HydroOne is a two-year-old quasi-private/public company, a monopoly, exempt from public oversight, FOIA requests, customer complaints and its Sunshine list. The Province’s HydroOne ownership is 70%.

If the deal is approved, Avista customers will share responsibility in Ontario’s Green Energy Act and HydroOne’s carbon emissions mandates that become increasingly cost-prohibitive on 2020, 2035 & 2050 timelines. This Act and the Canada- wide $50 per ton tax on carbon do not represent Avista customer’s best interest. The Act will increase customer costs another 1,230% by Cap and Trade (C&T) mandates beginning now. Cap and Trade is but an unregulated liberal-minded means of fleecing utility customers for a useless purpose and under false pretense. For example, consumers are compelled to share pass-through costs for a carbon tax as they purchase Canadian products from, i.e., a B.C. company’s 2016 $55 million carbon tax bill.

HydroOne now owns Avista’s 13 hydro-electric dams (with 1,024 MW of capacity) on the Columbia River and in Alaska. In Cap and Trade terms, HydroOne may refashion Avista’s hydro dam assets located in Washington, Idaho, and Montana into “clean energy credits”, a maneuver enabling Hydro One to avoid paying California’s (or Ontario’s) $8 billion climate exchange fees to satisfy the Green EnergyAct’s C&T 2020 mandate. The transfer of dams likely assures the Avista Territory’s loss of preference to Avista’s electric power on the Columbia River system8.

Ontario’s Green Energy Act prohibits its use of coal-fired plants, once its cheapest and most reliable electricity, but Hydro One has given Avista a pass for a time on retaining its 233 megawatts of thermal-coal generation in Montana which supplies 33% of Avista’s thermal electricity. The Act mandates that wind turbines generate electricity in Ontario, an experience found to be highly inefficient, and proved as unreliable and with very high costs in both Ontario9 and Washington and widely opposed in Ontario, Europe, several US states, & Australia10.

In a sprint to avoid Ontario’s Green Energy Act’s 2020 enforced Cap and Trade fees on carbon emissions, Canadian utilities purchased $74 million of U.S. hydroelectric assets in 2016 and $28.7 billion more by February 201711 to feed an insatiable need for cheap, reliable green power assets. Forbes listed 11 other U.S. utilities targeted.

Ontario advertises its Green Energy Act plan as “virtuous”, but effects on people, jobs and economy are the exact opposite. It makes energy arbitrarily scarce. It damages people, families, ignores businesses and rights of private property. It penalizes emissions and masks negative consequences behind rhetorical benefits of new liberal government programs by making cheap energy artificially expensive.

The Green Energy Act, like Washington’s Energy Independence Act (I-937) of 2009 represents a grand social experiment conducted population-wide, without forethought, without pilot testing, without scientific proof, to satisfy a hasty policy—a policy that runs counter to best economic choices12, a policy to reduce a substance known to provide humongous monetary, human, and food producing benefit13: carbon dioxide— with illusion of reducing greenhouse emissions that will never occur, with consequences known to be unprovable, but at extraordinary high cost while failing to consider human consequences. Such goals have for more than a decade proved themselves as hurried failed experiments in Europe, UK, Australia, and in the U.S.14

Ontario’s and Washington’s Cap and Trade (C&T) harms people and needlessly risks economies, for example:

In Washington State by 2030, annual costs to reduce emissions will soar to $8,200 per household, with job losses rising to 82,000 per year, with gross domestic product down by $14.7 billion each year but without scoring a savings in temperature or sea level rise15.

Almost all Cap and Trade practices run counter to the purpose of mitigating climate, as they are not market­based17 but incorporate major elements of centrally- planned economies, for example: Co-opting for Green Energy guarantees energy poverty18; Since carbon emissions are unrelated to climate, any action to mitigate emissions becomes an expensive, useless exercise to control people; European experiences show they do not reduce emissions but invites more corporate welfare programs19; German anti-renewable citizen petitions have grown to over 1,000 and Germany’s Minister says energy subsidies are now at unsustainable levels and inducing de-industrialization2021; It’s a massive energy tax in disguise22; It forces peoples to conform, is oppressive on all but the rich23; Transfers important economic decisions from private hands to government, with loss of private property rights and overall net loss of gross domestic product, thus subordinating to elements of USSR- or Chinese-like central planning.

Renewables are inefficient and wasteful. They provide 0.6%24 of energy worldwide at a cost of $5.45 trillion that could have provided a five times larger supply in gigawatt equivalents from natural gas or CCS clean coal plants25.